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OREX' Positive Contrave Data Boosts Shares

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Orexigen Therapeutics, Inc. (OREX - Analyst Report) rose following the announcement of positive interim data from the Light Study on its obesity candidate, Contrave. Based on the encouraging data from the interim analysis, the company plans to re-submit the new drug application for Contrave to the FDA in the next few weeks with approval expected by Jun 2014.

We note that the randomized, double-blind, placebo-controlled Light Study (n = 8,900) is underway to assess the risk of major adverse cardiovascular events in overweight and obese patients treated with Contrave. The study is being conducted under a Special Protocol Assessment with the U.S. Food and Drug Administration (FDA).

The FDA had agreed that Contrave could be approved if the interim analysis met the specified criteria to exclude cardiovascular risk (hazard ratio of 2.0 with the upper bound of a 95% confidence interval using at least 87 events). The interim analysis met the specified criteria.

We remind investors that the company had received a complete response letter (CRL) from the FDA in Jan 2011 for Contrave. At the time of issuing the CRL, the FDA had expressed concerns regarding the long-term cardiovascular safety profile of Contrave, and had asked Orexigen to conduct an additional study.

Orexigen has submitted a Marketing Authorisation Application to the European Medicines Agency for Contrave with a final decision on the approval expected in the second half of 2014. Orexigen expects the interim analysis data from the Light Study to equip the company to answer the Committee for Medicinal Products for Human Use Day 120 List of Questions.

Our Take

We believe that the positive data from the study has improved the chances of Contrave being approved in both the U.S. and EU. Additionally, it will also help Orexigen secure a lucrative partnership to market Contrave in the ex-North American region.

We note that the company has a collaboration agreement with Takeda Pharmaceutical Company Limited (TKPYY - Snapshot Report) for the development and commercialization of Contrave in North America. Takeda has experience in the metabolic disorder market which should prove to be beneficial. The companies are preparing to launch Contrave.

Orexigen is looking for a partnership in the rest of the world. However, we note that Contrave, once launched, will be a late entrant in the obesity market. Last year, two obesity drugs - Belviq and Qnexa - were approved.

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